Private benefits, block transaction premiums and ownership structure |
| |
Authors: | Giovanna Nicodano Alessandro Sembenelli |
| |
Institution: | Faculty of Economics, University of Turin, Corso Unione Sovietica, 218bis, 10134 Turin, Italy |
| |
Abstract: | A simple model shows that both price premiums and standardized block premiums (SBPs) are biased measures of private benefits because they do not account for the transfer of control effectively taking place with the block. This depends not only on the fractional size of the block, but on the whole distribution of shareholdings. We propose an alternative methodology to measure private benefits which makes it possible to weight the size of traded blocks on the basis of their strategic power. We apply our method to a sample of Italian block transactions and show that the traditional method underestimates control rents. The sensitivity of private benefits to net worth, leverage, and nonvoting shares is also examined. Finally, we show how to forecast the price of out-of-sample blocks of shares on the basis of information on company capital and ownership structure. |
| |
Keywords: | Power index Control rents Ownership structure Acquisitions Market for corporate control |
本文献已被 ScienceDirect 等数据库收录! |
|